The News Journal | Opinion | by Alan Muller
As Delaware reaches the peak of its political season, there’s no more powerful example of the prevailing special interest chokehold than Senate Bill 80 (now replaced with the nearly identical Senate Substitute 1).
This bill would create a new line item charge (“distribution system improvement charge”) on Delmarva Power electric and gas bills, without meaningful opportunities for public review of the additional charges. Total charges without a “rate case” could amount to $24 million.
In some respects this proposal resembles the undying “Bloomgate” scandal, which largely replaced investment in “renewable” energy with ratepayer subsidies for increased use of natural gas, a fossil fuel.
SB 80/SS 1 is strongly opposed by Delaware Public Advocate Drew Slater, and has no objective justification.
“Exelon is not requesting this legislation because it needs more money for reliability investment; if it really needed the DSIC funds for that, it would not have agreed to cap its reliability spending from 2015-2019 to $225 million,” Slater writes.
“Rather, it is requesting this legislation because DPL is not currently earning its Commission-approved 9.7% return on equity, but instead is earning around 7%.”
A second main excuse is that the bill grants “the same authority that has been previously granted to water utilities.” This is misleading because water utilities are competing to expand their service areas to profit from sprawl development, and they like to make their existing customers pay for the expansions.
Delmarva’s service areas have been fixed for decades and electricity sales are increasing very little if at all. The cost of maintaining the existing utility infrastructure is already covered in the existing rate structure. SB 80 is simply a tool for reaching deeper into customers’ pockets.
We are told SB 80/SS 1 is supported by the Public Service Commission (PSC) staff, the Chair of the PSC, Dallas Winslow, the Delaware State Chamber of Commerce, and the International Brotherhood of Electrical Workers (who work for Delmarva and do what they are told).
It’s prime sponsor is Sen. Harris McDowell, who chairs the Senate Environmental, Natural Resources & Energy Committee and has long represented the interests of Delmarva Power in the General Assembly. Other sponsors of this consumer ripoff bill include Rep. Trey Paradee (Chair of the House Energy Committee) Sens. Cathy Cloutier, Gerald Hocker, and Nicole Poore; Reps. William Carson, Debra Heffernan, Debbie Hudson, Quinton Johnson, Valerie Longhurst, Steve Smyk, and Dave Wilson. It is not clear that any of these supporters reached out for opposing points of view before signing on.
Delmarva Power is now a part of Chicago-based Exelon Energy, the largest “regulated” utility in the US, with 2016 revenues of over $30 billion and a presence in almost every US state. Utility mergers are seldom in the public interest for many reasons, a key one being that larger corporations can more easily concentrate political resources in any locality they wish to push around. Thus, Exelon is reported to have 6 full-time lobbyists pushing SB 80/SS 1 in the Delaware General sembly.
It’s in the nature of utilities to amass great economic, political, and psychological power over the communities they “serve.” They very often suborn the independence of organizations that should be fighting them. They are usually much stronger than the regulatory commissions charged with controlling them in the public interest, such as the Delaware PSC. It is much easier for both regulators and legislators to say “yes” than “no” to Exelon. But legislators are supposed to represent the constituents who elected them, not Exelon. The bad effects of not standing up for residents are well illustrated by our constantly increasing electric bills at the same time wholesale electricity prices have been trending downwards.
One legislator opposing SB 80/SS 1 is Rep. John Kowalko of Newark, who used to chair the House Energy Committee.
In correspondence with his fellow legislators about this bill, Kowalko said:
“In my time working with the Public Service Commission and on the Energy Committee, I cannot recall a proposal more specifically designed to squeeze profit out of our constituents without providing any improvement in service.”
SB 80/SS 1 is scheduled to be taken up by the Senate Energy committee on June 7. If approved by the committee it will go to the floor of the Senate for a vote. If it passes the Senate it will go to a House Energy committee and then, if approved there, to the House. If the bill passes through both houses it could and should be vetoed by Governor John Carney. We urge all Delmarva Power customers to contact their Senator and Representative to oppose this bad bill. Isn’t Bloomgate enough of a lesson? Sometimes,when sensing a strong current of public opinion, legislators do respond. They need to hear from you — today.
Alan Muller directs Green Delaware and has been involved in many utility regulatory matters.